Once the darling of the OSS sector with annual sales of more than $200 million, Micromuse Inc. (Nasdaq: MUSE) has hit a rocky patch. Having restated its results for 2000 to 2003 in May this year to avoid a Nasdaq delisting, its latest scrape, a revenues warning, saw its share price go into free fall and its valuation drop to a 12-month low (see Micromuse Unveils Turgid Q3).

The announcement that revenues for the third quarter would be "in the range of $34.5 to $35.5 million" -- down from $38.3 million in the previous quarter and below the analyst consensus of $39.4 million -- sent the share price tumbling by $1.30, more than 20 percent, to $5.17 by the end of Tuesday, though the stock had hit its 12-month low of $3.97 during the day. Its 12-month high is $10.55, hit in mid February.

That drop was the result of furious trading that saw the day's volume hit 17.22 million, compared with the daily average of just more than one million shares. Micromuse has 78.27 million shares outstanding.

Yesterday offered little respite for the stock. It dropped another 18 cents, or 3.5 percent, to $4.99 as 3.6 million shares were traded. That further dip took its capitalization down to $390 million, less than half its mid-February valuation.

Get further details at Boardwatch.

— Ray Le Maistre, International Editor, Boardwatch

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